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Microsoft Gets Its Tablet Strategy Right

This article is more than 10 years old.

For years, Microsoft tried unsuccessfully to make a foray into the tablet market dominated by Apple. In the last year the company had some success --making its presence felt in this market, and IDC predicting better days ahead for the software pioneer.

Windows-based tablets market share has risen from less than 1% in 2012 to 3.4% in 2013, and is expected to reach 10.2% in 2017.

What made the difference? What did Microsoft do right this time around? Two strategic moves, in our opinion.

The first was development of Surface 2, which gets the hardware-software bundle right at a competitive price. With its Windows operating systems, Office Suite and keyboard, the Surface 2 has bridged the gap between laptop and tablet, appealing to users who seek the full functionality of a laptop rather than a smartphone in a tablet.

“The Microsoft tortoise has been playing a slow-and-steady strategy on mobile, largely because it was about 1,000 years late to the starting gate writes New York Times’ Bob Tedeschi. “But Microsoft’s continued dominance with Windows and Office gave it time to develop a mobile strategy while maintaining a prominent place on desktops.”

“The value proposition of the base Surface 2 seems about right,” he continues. “For around the price of an iPad, you get a tablet that’s great for watching movies, checking email, browsing the web and using most of the basic apps you’ll need.”

The second strategy is a partnership with Best Buy which is beginning to pay off, as discussed in a previous piece.

Last June Microsoft MSFT +0.94% and Best Buy BBY -0.92% entered a partnership whereby Microsoft set Windows Stores at Best Buy. Sales of Microsoft’s Surface 32GB topped the list of items sold at Best Buy on Black Friday, according to iPad Insight.

The sales picture was quite different at Walmart, where Apple AAPL -0.33%’s iPad Mini 16GB topped the list, and Target TGT +0.09%, where Apple’s iPad Air 16GB topped the list.

To be fair, data from one season isn’t sufficient to confirm a trend. Nonetheless, Surface’s superior performance in Best Buy stores demonstrates that electronic gadgets are not commodities that can be purchased merely anywhere, especially as these products become more sophisticated.

Besides, getting into retailing can be a very profitable enterprise for gadget makers, as the history of Apple stores confirms.

Microsoft’s Windows Stores occupy between 1,500 square feet to 2,200 square feet of Best Buy floor space, allowing consumers to compare and purchase a broad range of the company’s products and accessories, including Windows-based tablets and PCs, Windows Phones, Microsoft Office, Xbox, and so on.

The bottom line: Though late, Microsoft is getting its Tablet strategy right by addressing genuine consumer needs; and by letting consumers experience the product in its retail stores. Will it catch up with market pioneer and leader Apple? It remains to be seen.